According to The Nikkei Asian Review today, the Australian housing market is riding high. While some of the country's top officials in Australia worry about a bubble, others are hailing the boom.The median price for detached homes in the January-March quarter stood at AUD 914,056 (USD 719,106) in Sydney, the nation's biggest city, according to Australian real estate marketing and research company Domain Group. The figure was up 16% on the year and 39% higher than three years earlier.In Melbourne, the second-largest city, the median price was up 6.6% on the year and 22% versus three years earlier.A stroll down a residential street in Sydney reveals a forest of "for sale" signs on front lawns. Quite a few are marked as sold. Almost all properties put on the market sell within a week. Properties in Sydney reportedly hit a clearance rate of 87% at a recent weekend auction.Hot and hotterAndrew Wilson, senior economist at Domain Group, said that a long-standing shortage of living space and the country's low interest rates are behind the boom. The Reserve Bank of Australia has been cutting its cash rate target since December 2011. The central bank recently slashed its policy rate by 25 basis points in February and again in May. The rate is now sitting at a low of 2%. A quarter century ago, it was between 17% and 18%.The market has been on a roll for more than two years. Wilson said the price rises have accelerated since the beginning of the year. The median price of detached houses in Sydney is forecast to top A$1 million by the end of the year, before leveling off.For homeowners, higher values are good news. In an apparent ripple effect, sales of yachts and other luxury goods have been increasing.For the have-nots, however, the dream of owning a home is receding. With Australia's resource boom over, the national wage price index rose 2.3% over the last year, failing to keep pace with house prices.Credibility gapUntil recently, Australian officials took the housing market boom as a sign of healthy growth, owing to a rising population buoyed by new immigrants and other factors. But a turning point seems to have come earlier this month: Treasury Secretary John Fraser warned Sydney and parts of Melbourne are "unequivocally" in a housing bubble. Central bank Gov. Glenn Stevens followed suit, saying: "Yes, I am concerned about Sydney. I think some of what's happening is crazy."Politicians are more sanguine. Prime Minister Tony Abbott said that as a homeowner himself, he wants house prices to be modestly increasing. Treasurer Joe Hockey downplayed the difficulties faced by entry-level buyers, saying, "The starting point for a first homebuyer is to get a good job that pays good money." Readily available credit means such buyers should have no big problems with rising property prices, in his view.For Australians, real estate is the easiest asset to invest in. Many buyers take advantage of "negative gearing," in which the income from a property is less than the cost of owning and maintaining it. This loss is deductible from taxes, along with mortgage interest and depreciation on furniture. The tax breaks are under attack from the political opposition as a giveaway to the rich.With its close ties to business, the Liberal-National coalition, led by Abbott, does not want to scrap the rules. In reality, it is difficult for the government to introduce measures that could chill the housing market, given that it is propping up the economy now that the resource boom has ended.Seller's marketAustralia is attractive to foreigners because of its pleasant climate and good educational system. This has brought a flood of cash from China that is keeping the Australian property market afloat. In Hurstville, south of Sydney, people of Chinese origin make up more than half the residents. Housing prices in the area are 10 times higher than they were about 30 years ago. Many older residents are putting their houses on the market, saying this is the best time to sell.In an effort to ease Australia's dependence on resources and diversify the economy, the central bank looks set to maintain its easy money policy. This liquidity is now sloshing into the student apartment market. With the number of foreign students hitting a record high this year, concern over a lack of housing is growing. Sydney authorities recently raided a three-bedroom house crammed with 58 beds that had been rented to international students and others. Companies from Singapore, the U.K. and the U.S. see business opportunities in building large student housing complexes in Sydney, Melbourne, Brisbane and elsewhere.